Hurting the City will hurt the EU too, experts remind MPs

Hayley Kirton covered law, professional services and banking at City A.M.

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The UK voted to wave goodbye to the EU last June (Source: Getty)

Hayley Kirton

Attempts by other EU member states to undermine the City of London's financial crown will wind up hurting them too, banking and finance experts reminded MPs today.

Representatives from influential City groups, along with deputy editor of the Telegraph Allister Heath, also told the International Trade Committee the City would need to devise a unique solution ensure firms still had access to EU markets post-Brexit.

Chris Cummings, chief executive of The Investment Association, cautioned attempts by other European cities to steal away the financial capital crown for themselves could result in the sector becoming scattered, disjointed and ultimately less powerful.

"If the EU 27 wish to pursue a move to repatriate [clearing] then the result of the ensuing fragmentation would not help EU 27 corporates," warned Gary Campkin, director of policy and strategy at TheCityUK. "It is an issue they need to think very, very carefully about."

Speaking to the MPs, Campkin said the future of the country's trade policy would be "a balance between looking at the market access we have with the EU but also looking at developing and emerging economies elsewhere in the world... it's one of the biggest opportunities coming from Brexit".

Heath added: "In five years time, in ten years time, I can't see how it will make sense for us to maintain the entirety of EU regulation for financial services, given that some of this regulation isn't working very well for the UK."

However, Cummings warned against diverging too far from other countries' standards, as regulatory cohesion "reduces the frictional cost [for global businesses] and also the ability for firms to trip over local regulatory requirements".

Cummings added the UK could unwittingly "shoot itself in the foot" if its red tape differed too much from other economies.

However, Heath was doubtful the financial sector would shed as many jobs post-Brexit as some other commentators had suggested. "Far more jobs were lost in the City during the financial crisis," he said.